Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 15, 2023

ADVANCE AUTO PARTS, INC.

(Exact name of registrant as specified in its charter)


Delaware	001-16797	54-2049910
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

4200 Six Forks Road, Raleigh, North Carolina 27609

(Address of principal executive offices) (Zip Code)

(540) 362-4911

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of each exchange on which registered

Common Stock, $0.0001 par value

AAP

New York Stock Exchange

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

INFORMATION TO BE INCLUDED IN THE REPORT

Item 2.02 Results of Operations and Financial Condition.

On November 15, 2023, Advance Auto Parts, Inc. (the "Company") issued a press release setting forth its financial results for its third quarter ended October 7, 2023. The press release is furnished as Exhibit 99.1 to this Report and is hereby incorporated by reference in this Item 2.02.

As provided in General Instruction B.2 of Form 8-K, the information and exhibit contained in this Current Report on Form 8-K shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.


Exhibit No.			Exhibit Description

99.1			Press Release, dated November 15 , 2023, issued by Advance Auto Parts, Inc.
101.1			Pursuant to Rule 406 of Regulation S-T, the cover page to this Current Report on Form 8-K is formatted in Inline XBRL.
104.1			Cover Page Interactive Data File (embedded within the Inline XBRL document included in Exhibit 101.1)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


						ADVANCE AUTO PARTS, INC.

Date: November 15, 2023						/s/ Anthony A. Iskander
						Anthony A. Iskander
						Interim Chief Financial Officer, Senior Vice President, Finance and Treasurer

Exhibit 99.1

Advance Auto Parts Reports Third Quarter 2023 Results and

Provides Updates on Strategic and Operational Review

Q3 Net Sales Increased 2.9% to $2.7 Billion; Comparable Store Sales Increased 1.2%

Executing on New $150 Million Cost Reduction Program

Initiates Sale Processes for Worldpac and Canadian Business

RALEIGH, N.C., November 15, 2023 - Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America, that serves both professional installer and do-it-yourself customers, announced its financial results for the third quarter ended October 7, 2023.

“Since joining Advance, I have partnered with the board and management team to move with speed in conducting a comprehensive review of the business,” said Shane O'Kelly, president and chief executive officer. “We are taking decisive actions to position Advance for long-term success and create meaningful value for our shareholders. Today we are announcing initial actions from our review process that will allow us to capitalize on significant opportunities ahead. First, we are launching a new cost reduction program that we expect will generate at least $150 million in savings on an annualized basis. We expect to reinvest up to $50 million of these savings in our team members with a clear focus on improving the retention of our frontline team members. At the same time, we have made a strategic decision to focus on our blended box business model and are therefore initiating separate sale processes for Worldpac as well as our Canadian business.

“We are committed to stabilizing the company and returning Advance to profitable growth, and our frontline team’s passion and extensive knowledge is integral to how we succeed. Seeing our frontline team members in action delivering for customers, coupled with robust industry fundamentals and strong vendor relationships, has reaffirmed my optimism that by making rigorous strategic and operational decisions now, Advance will be well positioned to capitalize on the opportunities ahead and deliver value for shareholders.”

Third Quarter 2023 Results (1)

Third quarter 2023 Net sales totaled $2.7 billion, a 2.9% increase compared with the third quarter of the prior year. Comparable store sales increased to 1.2%.

Gross profit decreased 16.3% to $1.0 billion. Gross profit margin was 36.3% of Net sales compared with 44.6% of Net sales in the third quarter of the prior year. This was primarily driven by a change in estimate for inventory reserves that resulted in a one-time impact of approximately $119 million. In addition, the company incurred higher product costs that were not fully covered by pricing actions and elevated supply chain costs. This was partially offset by a reduction in LIFO-related expenses.

SG&A expenses were $1.0 billion, which were 37.9% of Net sales compared with 38.2% in the third quarter of the prior year.

The company's Operating loss was $43.7 million, or (1.6)% of Net sales, compared with 6.5% in the third quarter of the prior year.

The company's effective tax rate was 24.4%, compared with 24.7% in the third quarter of the prior year. The company's Diluted loss per share was $(0.82), compared with Diluted earnings per share of $1.92 in the third quarter of the prior year.

Net cash provided by operating activities was $30.4 million through the third quarter of 2023 versus $483.1 million in the same period of the prior year. This was primarily driven by lower Net income and an increase in cash used in working capital. Through the third quarter of 2023, Free cash flow was an outflow of $156.8 million compared with an inflow of $149.5 million in the same period of the prior year.

All comparisons are based on the corrected results of the same time period in the prior year as depicted in the financial tables herein, which include the correction of non-material errors the company discovered in previously reported results.

Strategic Review Update

The company has initiated separate sale processes for the potential divestiture of Worldpac and the company’s Canada business. Worldpac, a leading automotive wholesale distributor of original equipment and aftermarket parts for all makes/all models, is highly recognized for its world class technology, catalog, product brand assortment and training. The company's Canadian business, which predominantly serves commercial customers, goes to market under the Carquest banner.

The company has engaged Centerview Partners to assist in the sale processes. The company has not set a timetable for the conclusion of the sale processes and does not intend to comment on or provide updates regarding these matters unless and until the processes are concluded or it determines that further disclosure is appropriate or required.

(1) Comparable store sales include locations open for 13 complete accounting periods and excludes sales to independently owned Carquest locations.

Capital Allocation

On October 31, 2023, the company declared a regular cash dividend of $0.25 per share to be paid on January 26, 2024 to all common stockholders of record as of January 12, 2024.

Full Year 2023 Guidance

Tony Iskander, interim chief financial officer, said, “Based on our year-to-date results and current business trends, we are adjusting our previously provided full year outlook ranges. Our updates include the impact of non-recurring expenses in Q3 as well as continued pressure in Q4 from higher product costs that we do not expect to offset with price. We are taking significant steps to improve our cost structure and remain focused on returning the business to profitable growth.”


	Prior FY 2023 Outlook						Updated FY 2023 Outlook
	As of August 23, 2023						As of November 15, 2023
($ in millions, except per share data)	Low			High			Low			High
Net sales	$	11,250		$	11,350		$	11,250		$	11,300
Comparable store sales (1)	(0.5)		%	0.5		%	(0.5)		%	0.0		%
Operating income margin	4.0		%	4.3		%	1.8		%	2.0		%
Income tax rate	25.0		%	25.0		%	25.0		%	25.0		%
Diluted EPS	$	4.50		$	5.10		$	1.40		$	1.80
Capital expenditures	$	200		$	250		$	200		$	250
Free cash flow (2)	$	150		$	250		$	50		$	100
New store and branch openings	40			60			55			65

(1) Comparable store sales include locations open for 13 complete accounting periods and excludes sales to independently owned Carquest locations.

(2) Free cash flow is a non-GAAP measure. For a better understanding of the company's non-GAAP adjustments, refer to the reconciliation of non-GAAP financial measures in the accompanying financial tables included herein.

Investor Conference Call

The company will detail its results for the third quarter ended October 7, 2023 via a webcast scheduled to begin at 8 a.m. Eastern Time on Wednesday, November 15, 2023. The webcast will be accessible via the Investor Relations page of the company's website (ir.AdvanceAutoParts.com).

To join by phone, please pre-register online for dial-in and passcode information. Upon registering, participants will receive a confirmation with call details and a registrant ID. While registration is open through the live call, the company suggests registering a day in advance or at minimum 10 minutes before the start of the call. A replay of the conference call will be available on the company's Investor Relations website for one year.

About Advance Auto Parts

Advance Auto Parts, Inc. is a leading automotive aftermarket parts provider that serves both professional installer and do-it-yourself customers. As of October 7, 2023 Advance operated 4,785 stores and 320 Worldpac branches primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. The company also served 1,307 independently owned Carquest branded stores across these locations in addition to Mexico and various Caribbean islands. Additional information about Advance, including employment opportunities, customer services, and online shopping for parts, accessories and other offerings can be found at www.AdvanceAutoParts.com.


Investor Relations Contact:			Media Contact:
Elisabeth Eisleben			Darryl Carr
T: (919) 227-5466			T: (984) 389-7207
E: invrelations@advanceautoparts.com			E: AAPCommunications@advance-auto.com

Forward-Looking Statements

Certain statements herein are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are usually identifiable by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “likely,” “may,” “plan,” “position,” “possible,” “potential,” “probable,” “project,” “should,” “strategy,” “will,” or similar language. All statements other than statements of historical fact are forward-looking statements, including, but not limited to, statements about our strategic initiatives, operational plans and objectives, including cost reduction initiatives, our ability to complete the potential divestiture of Worldpac and the company’s Canada business and expectations for economic conditions, future business results and future financial performance, as well as statements regarding underlying assumptions related thereto. Forward-looking statements reflect our views based on historical results, current information and assumptions related to future developments. Except as may be required by law, the company undertakes no obligation to update any forward-looking statements made herein. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements. They include, among others, factors related to the company’s leadership transition, the timing and implementation of strategic initiatives, our ability to hire, train and retain qualified employees, deterioration of general macroeconomic conditions, the highly competitive nature of our industry, demand for our products and services, complexities in our inventory and supply chain and challenges with transforming and growing our business. Please refer to “Item 1A. Risk Factors” of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), as updated by our subsequent filings with the SEC, for a description of these and other risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements.


Advance Auto Parts, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands) (unaudited)

	October 7, 2023(1)		December 31, 2022 (2,3)
Assets
Current assets:
Cash and cash equivalents	$	317,528	$	269,282
Receivables, net	868,305		698,613
Inventories, net	4,940,037		4,911,053
Other current assets	185,249		163,695
Total current assets	6,311,119		6,042,643
Property and equipment, net	1,663,080		1,690,139
Operating lease right-of-use assets	2,600,946		2,607,690
Goodwill	989,934		990,471
Other intangible assets, net	598,699		620,901
Other assets	75,809		62,429
Total assets	$	12,239,587	$	12,014,273
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	3,942,591	$	4,136,415
Accrued expenses	712,112		641,099
Current portion of long-term debt	—		185,000
Other current liabilities	478,603		427,480
Total current liabilities	5,133,306		5,389,994
Long-term debt	1,785,717		1,188,283
Noncurrent operating lease liabilities	2,209,899		2,278,318
Deferred income taxes	382,840		415,997
Other long-term liabilities	87,669		87,214
Total stockholders' equity	2,640,156		2,654,467
Total liabilities and stockholders’ equity	$	12,239,587	$	12,014,273

(1)This preliminary condensed consolidated balance sheet has been prepared on a basis consistent with the company's previously prepared consolidated balance sheets filed with the Securities and Exchange Commission (“SEC”), but does not include the footnotes required by accounting principles generally accepted in the United States of America (“GAAP”).

(2)The balance sheet at December 31, 2022 has been derived from the audited consolidated financial statements at that date, but does not include the footnotes required by GAAP.

(3)The balance sheet at December 31, 2022 reflects the corrected results as depicted in the financial tables herein, which include the correction of non-material errors the company discovered in previously reported results.


Advance Auto Parts, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data) (unaudited)

	Twelve Weeks Ended				Forty Weeks Ended
	October 7, 2023 (1)		October 8, 2022 (1,2)		October 7, 2023 (1)		October 8, 2022 (1,2)
Net sales	$	2,719,079	$	2,641,341	$	8,822,738	$	8,680,977
Cost of sales, including purchasing and warehousing costs	1,732,420		1,462,094		5,220,200		4,821,037
Gross profit	986,659		1,179,247		3,602,538		3,859,940
Selling, general and administrative expenses (2)	1,030,355		1,008,226		3,407,445		3,301,959
Operating (loss) income	(43,696)		171,021		195,093		557,981
Other expense, net:
Interest expense	(19,407)		(12,039)		(69,993)		(35,114)
Loss on early redemption of senior unsecured notes	—		—		—		(7,408)
Other income (expense), net	(1,216)		(5,054)		(206)		(5,282)
Total other, net	(20,623)		(17,093)		(70,199)		(47,804)
(Loss) Income before provision for income taxes	(64,319)		153,928		124,894		510,177
Provision for income taxes	(15,686)		38,047		34,649		123,383
Net (loss) income	$	(48,633)	$	115,881	$	90,245	$	386,794

Basic (loss) earnings per common share	$	(0.82)	$	1.93	$	1.52	$	6.38
Weighted-average common shares outstanding	59,474		60,053		59,411		60,656

Diluted (loss) earnings per common share	$	(0.82)	$	1.92	$	1.51	$	6.34
Weighted-average common shares outstanding	59,630		60,384		59,588		61,045

(1)These preliminary condensed consolidated statements of operations have been prepared on a basis consistent with the company's previously prepared consolidated statements of operations filed with the SEC, but do not include the footnotes required by GAAP.

(2)The twelve and forty weeks ended October 8, 2022 reflect the corrected results as depicted in the financial tables herein, which include the correction of the non-material errors the company discovered in previously reported results.


Advance Auto Parts, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands) (unaudited)

	Forty Weeks Ended
	October 7, 2023 (1)		October 8, 2022 (1,2)
Cash flows from operating activities:
Net income	$	90,245	$	386,794
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	234,976		215,224
Share-based compensation	37,435		40,291
Loss and impairment on property and equipment, net	1,886		2,858
Loss on early redemption of senior unsecured notes	—		7,408
Provision for deferred income taxes	(33,059)		24,144
Other, net	1,499		2,064
Net change in:
Receivables, net	(170,371)		(89,304)
Inventories, net	(41,025)		(249,729)
Accounts payable	(191,871)		177,103
Accrued expenses	145,704		(27,576)
Other assets and liabilities, net	(45,015)		(6,183)
Net cash provided by operating activities	30,404		483,094
Cash flows from investing activities:
Purchases of property and equipment	(187,201)		(333,639)

Proceeds from sales of property and equipment	2,001		1,821
Net cash used in investing activities	(185,200)		(331,818)
Cash flows from financing activities:
Borrowings under credit facilities	4,805,000		1,123,000
Payments on credit facilities	(4,990,000)		(938,000)
Borrowings on senior unsecured notes	599,571		348,618
Payments on senior unsecured notes	—		(201,081)
Dividends paid	(194,322)		(336,230)
Repurchases of common stock	(14,237)		(542,608)
Other, net	(1,028)		463
Net cash provided by (used in) financing activities	204,984		(545,838)
Effect of exchange rate changes on cash	(1,942)		(15,662)
Net increase (decrease) in cash and cash equivalents	48,246		(410,224)
Cash and cash equivalents, beginning of period	269,282		601,428
Cash and cash equivalents, end of period	$	317,528	$	191,204

(1)These preliminary condensed consolidated statements of cash flows have been prepared on a consistent basis with the company's previously prepared statements of cash flows filed with the SEC, but do not include the footnotes required by GAAP.

(2)The forty weeks ended October 8, 2022 reflect the corrected results as depicted in the financial tables herein, which include the correction of the non-material error the company discovered in previously reported results.

Restatement of Previously Issued Financial Statements

In connection with the preparation of the financial statements for the third quarter of 2023, the company identified additional errors impacting cost of sales and selling, general and administrative costs. The company evaluated the errors and determined that the related impacts were not material to the previously issued consolidated financial statements for any prior period. A summary of the corrections to the impacted financial statement line items in our previously issued Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Stockholders’ Equity and Consolidated Statement of Cash Flows for the year ended December 31, 2022 included in previously filed Annual Reports on Form 10-K and Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, Condensed Consolidated Statements of Comprehensive Income, Condensed Consolidated Statements of Changes in Stockholders’ Equity and Condensed Consolidated Statements of Cash Flows for periods presented below, which were presented in previously filed Quarterly Reports on Form 10-Q, are as follows:


Corrected Condensed Consolidated Balance Sheet
October 8, 2022
	As Previously Reported		Adjustments		As Corrected
Assets
Receivables, net	$	845,667	$	(2,795)	$	842,872


Total current assets	6,162,520		(2,795)		6,159,725





Total assets	$	12,132,079	$	(2,795)	$	12,129,284

Liabilities and Stockholders’ Equity
Accounts payable	$	4,097,412	$	(16,579)	$	4,080,833


Accrued expenses	681,216		10,312		691,528
Total current liabilities	5,442,901		(6,267)		5,436,634




Total liabilities	9,416,004		(6,267)		9,409,737




Accumulated other comprehensive loss	(54,298)		6,364		(47,934)
Retained earnings	4,726,823		(2,892)		4,723,931
Total stockholders’ equity	2,716,075		3,472		2,719,547
Total liabilities and stockholders’ equity	$	12,132,079	$	(2,795)	$	12,129,284


Corrected Condensed Consolidated Balance Sheet
December 31, 2022
	As Previously Reported		Adjustments		As Corrected
Assets


Inventories, net	$	4,915,262	$	(4,209)	$	4,911,053

Total current assets	6,046,852		(4,209)		6,042,643





Total assets	12,018,482		(4,209)		12,014,273

Liabilities and Stockholders’ Equity
Accounts payable	4,123,462		12,953		4,136,415
Accrued expenses	634,447		6,652		641,099


Total current liabilities	5,370,389		19,605		5,389,994




Total liabilities	9,340,201		19,605		9,359,806





Retained earnings	4,744,624		(23,814)		4,720,810
Total stockholders’ equity	2,678,281		(23,814)		2,654,467
Total liabilities and stockholders’ equity	$	12,018,482	$	(4,209)	$	12,014,273


Corrected Condensed Consolidated Statement of Operations
October 8, 2022
	Twelve Weeks Ended						Forty Weeks Ended
	As Previously Reported		Adjustments		As Corrected			As Previously Reported		Adjustments		As Corrected
Cost of sales	$	1,461,490	$	604	$	1,462,094		$	4,808,888	$	12,149	$	4,821,037
Gross profit	1,179,851		(604)		1,179,247			3,872,089		(12,149)		3,859,940
Selling, general and administrative expenses	1,002,653		5,573		1,008,226			3,289,940		12,019		3,301,959
Operating income	177,198		(6,177)		171,021			582,149		(24,168)		557,981



Other income (expense), net	(17,741)		12,687		(5,054)			(18,314)		13,032		(5,282)
Total other, net	(29,780)		12,687		(17,093)			(60,836)		13,032		(47,804)
Income before provision for income taxes	147,418		6,510		153,928			521,313		(11,136)		510,177
Provision for income taxes	36,436		1,611		38,047			126,137		(2,754)		123,383
Net income	$	110,982	$	4,899	$	115,881		$	395,176	$	(8,382)	$	386,794

Basic earnings per share	$	1.85	$	0.08	$	1.93		$	6.52	$	(0.14)	$	6.38
Basic weighted average shares	60,053				60,053			60,656				60,656

Diluted earnings per common share	$	1.84	$	0.08	$	1.92		$	6.47	$	(0.13)	$	6.34
Diluted weighted average shares	60,384				60,384			61,045				61,045


Corrected Statement of Cash Flows (unaudited)
Forty Weeks Ended October 8, 2022
	As Previously Reported		Adjustments		As Corrected
Net income	$	395,176	$	(8,382)	$	386,794

Net change in:
Receivables, net	(66,902)		(22,402)		(89,304)
Inventories	(284,271)		34,542		(249,729)
Accounts payable	187,331		(10,228)		177,103
Accrued expenses	(34,046)		6,470		(27,576)
Net cash provided by operating activities	$	483,094	$	—	$	483,094

Reconciliation of Non-GAAP Financial Measure

The company's financial results include certain financial measures not derived in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Management uses Free cash flow as a measure of its liquidity and believes it is a useful indicator to investors or potential investors of the company's ability to implement growth strategies and service debt. Free cash flow is a non-GAAP measure and should be considered in addition to, but not as a substitute for, information contained in the company's condensed consolidated statement of cash flows as a measure of liquidity.


Reconciliation of Free Cash Flow: (1)
	Forty Weeks Ended
(in thousands)	October 7, 2023		October 8, 2022
Cash flows provided by operating activities	$	30,404	$	483,094
Purchases of property and equipment	(187,201)		(333,639)
Free cash flow	$	(156,797)	$	149,455


Adjusted Debt to Adjusted EBITDAR: (1,2)
	Four Quarters Ended
(In thousands, except adjusted debt to adjusted EBITDAR ratio)	October 7, 2023		December 31, 2022
Total GAAP debt	$	1,785,717	$	1,373,283
Add: Operating lease liabilities	2,675,921		2,692,861
Adjusted debt	$	4,461,638	$	4,066,144

GAAP Net income	$	176,022	$	472,571
Depreciation and amortization	302,670		283,800
Interest expense	85,938		51,060
Other (income) expense, net	2,348		7,424
Provision for income taxes	48,445		137,180
Rent expense	600,261		594,838
Share-based compensation	48,122		50,978
Other noncash charges	59,975		7,408
Transformation related charges	26,367		—
Adjusted EBITDAR	$	1,350,148	$	1,605,259

Adjusted Debt to Adjusted EBITDAR	3.3		2.5

(1) The forty weeks ended October 8, 2022 and four quarters ended December 31, 2022 reflect the corrected results as depicted in the financial tables herein, which include the correction of non-material errors the company discovered in previously reported results.

(2) Beginning in first quarter 2023, the company no longer excludes transformation-related activities in non-GAAP measures. Prior period has been recast to conform to current year presentation.

NOTE: Management believes its Adjusted Debt to Adjusted EBITDAR ratio (“leverage ratio”) is a key financial metric for debt securities, as reviewed by rating agencies, and believes its debt levels are best analyzed using this measure. The company’s goal is to maintain an investment grade rating. The company's credit rating directly impacts the interest rates on borrowings under its existing credit facility and could impact the company's ability to obtain additional funding. If the company was unable to maintain its investment grade rating this could negatively impact future performance and limit growth opportunities. Similar measures are utilized in the calculation of the financial covenants and ratios contained in the company's financing arrangements. The leverage ratio calculated by the company is a non-GAAP measure and should not be considered a substitute for debt to net earnings, net earnings or debt as determined in accordance with GAAP. The company

adjusts the calculation to remove rent expense and to add back the company’s existing operating lease liabilities related to their right-of-use assets to provide a more meaningful comparison with the company’s peers and to account for differences in debt structures and leasing arrangements. The company’s calculation of its leverage ratio might not be calculated in the same manner as, and thus might not be comparable to, similarly titled measures by other companies.

Store Information

During the forty weeks ended October 7, 2023, 51 stores and branches were opened and 32 were closed, resulting in a total of 5,105 stores and branches as of October 7, 2023, compared with a total of 5,086 stores and branches as of December 31, 2022.

The below table summarizes the changes in the number of company-operated store and branch locations during the twelve and forty weeks ended October 7, 2023:


	Twelve Weeks Ended
	AAP	CARQUEST	WORLDPAC (1)	Total
July 15, 2023	4,471	319	319	5,109
New	10	1	1	12
Closed	(5)	(11)	—	(16)


Relocated	1	(1)	—	—
October 7, 2023	4,477	308	320	5,105


	Forty Weeks Ended
	AAP	CARQUEST	WORLDPAC (1)	Total
December 31, 2022	4,440	330	316	5,086
New	46	1	4	51
Closed	(10)	(22)	—	(32)


Relocated	1	(1)	—	—
October 7, 2023	4,477	308	320	5,105

(1) Certain converted Autopart International ("AI") locations will remain branded as AI going forward.

Cover	Aug. 23, 2023
Cover Page [Abstract]
Document Type	8-K
Document Period End Date	Nov. 15, 2023
Entity Registrant Name	ADVANCE AUTO PARTS, INC.
Entity Address, Address Line One	4200 Six Forks Road
Entity Address, City or Town	Raleigh
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	27609
City Area Code	540
Local Phone Number	362-4911
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0001158449
Amendment Flag	false
Title of 12(b) Security	Common Stock, $0.0001 par value
Security Exchange Name	NYSE
Entity Incorporation, State or Country Code	DE
Entity File Number	001-16797
Entity Tax Identification Number	54-2049910
Trading Symbol	AAP